Analytics major Latent View Analytics is all set to list on the D-Street on Tuesday. CNBC-TV18’s Reema Tendulkar decoded the reasons that made Latent View Analytics the most subscribed public issue.
A demand of 1.1 lakh crore for a Rs 600 crore issue is pretty astounding. There was a technical factor to it. Money that was locked in the Nykaa initial public offering (IPO) was released just prior to this issue and probably found its way here for deployment. Latent View is a data analytics company and the industry in which it operates is expected to grow at 18 percent to $333 billion by 2024.
The firm does prescriptive analysis for automobile companies to help them with productive maintenance. A few of its key clients include Microsoft, Uber, Adobe and 7-Eleven. However, the revenue growth for the company has been muted at 3 percent. Revenues were Rs 288 crore in FY19, which have risen to Rs 306 crore in FY21, the reason being the COVID-19 pandemic and also insourcing by one of its key clients, the name doing the round is PayPal.
The company has 45 clients, most of them are fortune 500 clients, 55 percent of its revenue comes from the top five clients and 95 percent of its revenues comes from the US.
EBITDA margins are healthy. The profit after tax (PAT) margins have risen from 20 percent two years ago to 29 percent. The return ratios are also healthy at over 20 percent.
The valuations for the company are also 43-44 times much cheaper than Happiest Minds.
Latent View has Rs 360 crore of cash on its books, plus it will raise the money via a fresh issue. Despite being a cash flow positive company, it has not distributed dividends in the last three years.
The market has clearly given it a thumbs up –this is the first data analytics company to get listed on the exchanges, so it has the first-mover advantage.
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